In First Action Under the FEND Off Fentanyl Act of 2024, FinCEN Restricts Three Mexican Financial Institutions From the U.S. Financial System

This Client Memorandum is available in Spanish here.

On June 25, 2025, the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published orders that prohibit U.S. financial institutions from transmitting funds to and from three Mexican financial institutions: CIBanco S.A. (“CIBanco”), Intercam Banco S.A. (“Intercam”) and Vector Casa de Bolsa, S.A. de C.V. (“Vector” and together with CIBanco and Intercam, the “Designated Entities”).^[1] The orders will become effective July 21.^[2] The orders broadly prohibit U.S. financial institutions from engaging in transmittals of funds with the Designated Entities. However, the orders do not restrict funds transmittals with the Designated Entities’ branches and subsidiaries outside of Mexico.

Pursuant to its authority under the FEND Off Fentanyl Act of 2024 (the “Fentanyl Act”), FinCEN determined that the Designated Entities are of “primary money laundering concern in connection with illicit opioid trafficking.”^[3] These orders mark the first time that FinCEN has utilized its authority to implement special measures under the Fentanyl Act.

Secretary of the Treasury Scott Bessent noted that the orders underscore “Treasury’s commitment to using all tools at our disposal to counter the threat posed by criminal and terrorist organizations trafficking fentanyl and other narcotics.”^[4] The orders follow the Trump Administration’s recent designation of cartels as Foreign Terrorist Organizations. [5] Furthermore, the Department of Justice has stated that it will prioritize investigating corporations that provide “material support” to the these cartels as well as “complex money laundering” schemes by organizations engaged in “laundering funds used in the manufacturing of illegal drugs,” including Chinese Money Laundering Organizations.[6]

U.S. financial institutions should carefully review their relationships with the Designated Entities and ensure compliance with the FinCEN orders. More broadly, U.S. financial institutions should consider reviewing their anti-money laundering programs’ controls pertaining to fentanyl-related illicit finance, including reviewing correspondent banking relationships with financial institutions in Mexico and China.^[7]

Non-U.S. financial institutions should also consider reviewing their exposure to activity by drug trafficking organizations. FinCEN’s authority under the Fentanyl Act is not limited to Mexico and it could target financial institutions in other jurisdictions.

FinCEN’s Orders

According to the FinCEN orders, CIBanco, Intercam and Vector facilitated money laundering by Mexican drug cartels involved in opioid trafficking. Specifically:

• CIBanco, which is Mexico’s 20th largest financial institution, was found by FInCEN to have “a history of ties to international DTOs [drug trafficking organizations] and facilitation of transactions on their behalf,” including the Gulf Cartel, the BLO Cartel and Cártel de Jalisco Nueva Generación (CJNG).^[8] FinCEN’s order noted several instances in which CIBanco moved money on behalf of Mexico-based companies involved in the procurement of precursor chemicals for the production of fentanyl. The order also includes examples of where CIBanco clients originated funds transfers to companies located in China that shipped precursor chemicals to Mexico.
• Intercam, which is the 25th largest financial institution in Mexico, was found by FinCEN to have processed funds transfers to China-based companies that are known to have shipped precursor chemicals to Mexico.^[9] FinCEN found that Intercam allowed a suspected “money mule,” who made 627 ATM deposits in the United States, to send approximately $1.9 million from the U.S.-based account into an Intercam account in Mexico, which FinCEN noted was meant to repatriate illicit funds to DTOs in Mexico. The order notes that Intercam had previously maintained accounts with several U.S.-based financial institutions but was removed after the institutions became aware of Intercam’s compliance issues, such as the bank “facilitating wire transfers lacking beneficiary information, processing checks funded by cash deposits, and using a trading account primarily for conducting same-name wire transfers.”^[10]
• Vector, which is the ninth-largest brokerage firm in Mexico, was found by FinCEN to have played a role in remitting money through wire transfers from Mexican DTOs to China-based companies that are known to have shipped precursor chemicals to Mexico.^[11] According to the order, Vector remitted over $17 million to multiple China-based companies in early 2021 for a company that was tied to an international drug trafficking organization. The order notes the Sinaloa Cartel’s relationship to Vector, finding that the firm facilitated a $1.5 million transfer by a Sinaloa “money mule.” The order also noted that Vector was involved in several bribes that the Sinaloa Cartel paid to a former Mexican public official, Genaro Garcia Luna.^[12]

Scope of the Prohibitions

The prohibitions in the orders go into effect July 21.

The orders impose restrictions on “covered financial institutions” as defined under 31 CFR 1010.100(t), which includes the U.S.-based offices and branches of banks, broker/dealers, and money services businesses. The orders prohibit such covered financial institutions from “engaging in any transmittal of funds from or to” the Designated Entities.

However, the orders note that the restrictions do not apply to funds transmittals with “branches, subsidiaries, and offices of” the Designated Entities that are located outside of Mexico, including any such branches, subsidiaries and offices located in the United States.

In its “Frequently Asked Questions” accompanying the orders, FinCEN noted its expectation that covered financial institutions “(1) implement procedures to ensure compliance with the terms of the orders; and (2) exercise reasonable due diligence to prevent engaging in transmittals of funds involving CIBanco, Intercam, or Vector.”^[13] FinCEN also advised covered financial institutions to “consider the finding of primary money laundering concern regarding CIBanco, Intercam, and Vector when complying with their other Bank Secrecy Act obligations, including any appliable obligations to establish and maintain anti-money laundering and countering the financing of terrorism (AML/CFT) compliance programs.”[14]

When the orders become effective, covered financial institutions will be authorized to reject the transmittal of funds from the Designated Entities. FinCEN noted that while the orders do not alter a financial institution’s SAR filing obligations, financial institutions “may consider” FinCEN’s identification of the Designated Entities as “being of primary money laundering concern in connection with illicit opioid trafficking” in fulfilling SAR filing obligations.

FinCEN noted that violations of the orders can have civil and criminal penalties.

Action by Mexican Authorities

Mexican President Claudia Sheinbaum condemned the orders on June 26, stating “The Treasury Department hasn’t provided a single piece of evidence to show that any money laundering was taking place.”^[15] The prior day, the Mexican Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público – SHCP) issued a note stating that the U.S. Department of the Treasury had not furnished Mexican authorities with corroborating evidence of illicit activity. SHCP noted that electronic transfers to legally constituted Chinese counterparties are commonplace in the context of Mexico’s USD 139 billion in annual trade with China.

On June 26, Mexican National Banking and Securities Commission’s (Comisión Nacional Bancaria y de Valores – CNBV) decreed the “the temporary managerial intervention of” CIBanco, Intercam and Vector.^[16] The CNBV announcements noted that this “intervention aims to replace their administrative bodies and their legal representatives in order to safeguard the rights of savers and customers of these institutions, given the implications that the measures announced by the Department of the Treasury of the United States of America may have on these banks.”^[17]

Counterparties to commercial agreements with the affected entities should review such arrangements to determine how it may impact the relationship, including with respect to existing and future transactions.

* * *

[1] FinCEN, Treasury Issues Unprecedented Orders under Powerful New Authority to Counter Fentanyl (June 25, 2025), available here.

[2] The orders will take effect 20-days after publication in the Federal Register. The orders are scheduled for publication in the Federal Register on June 30, 2025.

[3] The Fentanyl Act granted the Secretary of the Treasury the authority to take “special measures” after finding that a financial institution operating outside the United States is of primary money laundering concern in connection with illicit opioid trafficking. The “special measures” that are authorized include the special measures authorized under Section 311 of the PATRIOT Act, as well as authority to issue an order prohibiting any U.S. financial institution from transferring funds with the foreign financial institution that is the subject of the order. In issuing these orders, FinCEN utilized this special measure. While Section 311 actions typically proceed via a Notice of Proposed Rulemaking and then a final rule, here FinCEN utilized authority under the Fentanyl Act to proceed immediately via an order.

[4] U.S. Department of the Treasury, Treasury Issues Historic Orders Under Powerful New Authority to Counter Fentanyl (June 25, 2025), available here.

[5] See Paul, Weiss, President Trump Issues Executive Order Signaling a Push to Designate Drug Cartels as Foreign Terrorist Organizations (February 3, 2025), available here.

[6] Paul Weiss, DOJ Announces New Corporate and White-Collar Enforcement Policies and Priorities (May 15, 2025), available here; Mark Mendelsohn, Roberto Gonzalez, Benjamin Klein, Samuel Kleiner, How to Navigate Risks for Firms on Cartel-Related Activities (June 5, 2025), available here.

[7] FinCEN has previously highlighted risks associated with “U.S.-domiciled correspondent bank accounts held by Mexican and Chinese financial institutions.” FinCEN, Financial Trend Analysis: Fentanyl-Related Illicit Finance, FinCEN (April 9, 2025), available here; see also FinCEN, FinCEN Advisory: Supplemental Advisory on the Procurement of Precursor Chemicals and Manufacturing Equipment Used for the Synthesis of Illicit Fentanyl and Other Synthetic Opioids, (June 20, 2024), available here.

[8] FinCEN, Imposition of Special Measure Prohibiting Certain Transmittals of Funds Involving CIBanco S.A., Institución De Banca Multiple (June 25, 2025), available here.

[9] Id.

[10] Id.

[11] Id.

[12] Genaro Garcia Luna is Mexico’s former Secretary of Public Security who was convicted in the Eastern District of New York on February 21, 2023 for accepting bribes from the Sinaloa Cartel in exchange for favored treatment of the cartel by law enforcement. U.S. Attorney’s Office Eastern District of New York, Ex-Mexican Secretary of Public Security Genaro Garcia Luna Convicted of Engaging in a Continuing Criminal Enterprise and Taking Millions in Cash Bribes from the Sinaloa Cartel (Feb. 21, 2023), available here.

[13] FinCEN, Frequently Asked Questions: Subject: Section 2313a Orders Prohibit Certain Transmittals of Funds Involving CIBanco, Intercam, and Vector, (June 25, 2025), at 2, available here.

[14] Id.

[15] Megan Janetsky, Mexico’s President Slams Sanctions on Mexican Banks by Trump Administration, ABC News (June 26, 2025), available here.

[16] CNBV, The Governing Board of the CNBV decreed the temporary management intervention of two banking institutions: CI Banco, S.A. and Intercam Banco, S.A., (June 26, 2025); CNBV, The Governing Board of the CNBV decreed the temporary management intervention of Vector Casa de Bolsa, S.A. de C.V. (June 26, 2025).

[17] Id.